Bolivia nationalizes four power companies

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By Diego Ore and Eduardo Garcia
Sunday, May 2, 2010

LA PAZ, BOLIVIA -- Leftist Bolivian President Evo Morales said Saturday that he has nationalized four power companies, including a subsidiary of France's GDF Suez, in his drive to tighten state control over the impoverished economy.

Morales, a close ally of Venezuela's Hugo Chávez, nationalized Bolivia's key natural gas industry soon after taking office in 2006 and has since taken control of several utility companies as well as the Andean nation's biggest smelter and top telecommunications firm.

"We're here . . . to nationalize all the hydroelectric plants that were owned by the state before, to comply with the new constitution of the Bolivian state. Basic services cannot be a private business. We're recovering the energy, the light, for all Bolivians," he said in the central Cochabamba region.

Morales said the state now controls 80 percent of electricity generation in Bolivia and is aiming for complete government control over the sector.

The decree, read aloud by presidential spokesman Ivan Canelas, said the state is taking control of the stakes that private investors held in four power companies, including Corani, Guaracachi and Valle Hermoso, the country's biggest generating companies.

They emerged in the 1990s after the privatization of the state National Electricity Co. and account for about half of Bolivia's electricity market.

Morales likes to celebrate May 1, known as May Day or International Workers' Day, by nationalizing companies controlled by foreign investors.

On May Day last year, he nationalized Air BP Bolivia, a division of British oil major BP Group; on the same day in 2008, he took over Entel, the country's largest telecommunications company, until then controlled by Euro Telecom International, a unit of Telecom Italia.

Morales, the country's first indigenous president and a self-declared anti-capitalist, took office for a second term in January pledging to diversify the economy -- which relies on natural gas and mining exports -- and to launch state-run paper, cement, iron and lithium companies.

His efforts to give the state more control over the economy are very popular among Bolivia's indigenous majority, which maintains that foreign companies have ransacked the country's natural resources and invested little to help the poor.

Critics say Morales, 50, has scared away crucial foreign investment with nationalizations of companies and is not acting on behalf of all Bolivians but primarily for Aymara and Quechua Indians and other indigenous groups.

-- Reuters


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